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Makeover. New report recommends remaking how the U.S. Department of Energy manages its network of national laboratories, including a call to encourage collaborations between industry and lab researchers, such as computational scientists Michael Crowley (left) and Antti-Pekka Hynninen of the National Renewable Energy Laboratory in Colorado.

"The sad truth is that the institutional management structures that govern the labs have not advanced far beyond the Cold War, and [are] outdated, inflexible, and weakly connected to the marketplace, inhibiting U.S. innovation when we need it most," argues the report, which was released this week by the politically conservative Heritage Foundation, the liberal Center for American Progress, and the centrist Information Technology and Innovation Foundation (ITIF), all based in Washington, D.C.

Although the report echoes some long-standing calls for change, "what's surprising and new is that we were able to bridge the partisan and ideological divide, and get some agreement on how to make the labs more efficient and get more out of limited research dollars," says co-author Matthew Stepp of ITIF.

Spawned in the 1940s by the drive to build the first atomic bomb, DOE's national laboratories spend nearly $20 billion annually. Their broad portfolio of research ranges from nuclear weapons science and basic physics to better batteries and renewable energy technologies. The labs have never been seen as a model of stellar management, but complaints—from outsiders and insiders alike—of poor coordination, inefficient spending, and excessive bureaucracy have grown louder since the end of the Cold War. And although there have been several reform efforts over the past two decades, "[t]he labs have been largely running on autopilot for too long," the report's authors conclude. "A jolt to the system is needed now more than ever."

One jolt would be to name a single DOE undersecretary for science and technology to oversee the 13 nonweapons laboratories, instead of the two that do the job now. Another recommendation would remake how the department evaluates the contractors that run the labs for the federal government. The labs should also have more flexibility to set their own spending priorities, charge fees for the use of their facilities, and develop broader entrepreneurial partnerships with industry, the report asserts. The goal, the authors write, "is not to just tinker around the edges but to build policy reforms that re-envision the lab system."

The current system is enmeshed in red tape, reporting requirements, and program directives, according to the report. "Decisions that should be made by research teams and lab managers are instead preapproved and double checked by a long and growing chain of command at DOE," it notes. "At the smallest level, DOE, in concert with [the White House Office of Management and Budget] and Congress, micromanages internal lab-directed investment decisions."

To clear the thicket, the report calls on the White House to appoint a task force that would identify and get rid of duplicative rules. DOE also needs to adopt evaluation tools that focus less on process and more on results, it says, as well as consolidate most of the labs under the new undersecretary position.

Another needed reform, the report argues, is to make the labs friendlier to efforts to transform research into commercial products. "The problem is that the labs' tether to the market is weak, often by design," the authors write. And many DOE researchers and officials "hold that technology transfer fundamentally detracts from the research mission." One way to fix that, the report says, is to give labs greater leeway in setting market-based prices for industry's use of lab facilities. That pricing could help create incentives to enter into agreements with industry and produce more revenue for other lab activities, the report notes. A market-based fee structure could also help managers identify underutilized facilities. "If there is no market demand for a particular facility or service, then maybe DOE should consider shutting it down," Stepp says.

Adopting the report's suggestions will require buy-in from DOE, Congress, the White House, lab contractors, and users, Stepp says. But he believes that "there is significant interest in the administration and on both sides of the aisle in Congress in getting as much as we can out of the labs, and there are a lot of small changes they could make to start."

One former DOE lab director, however, is skeptical that implementing the report's recommendations will produce lasting change. "The report is very good in many respects, and I'm delighted to see these issues being discussed out in the light of day again," says Burton Richter, the director emeritus of DOE's SLAC National Accelerator Laboratory in Menlo Park, California. He supports many of the recommendations but says that the report doesn't "explain how you would actually achieve the culture change within DOE and Washington you'd need to persuade Congress and the bureaucrats to loosen the reins." He believes that a return to micromanagement is inevitable without a fundamental change in the culture.

One big cultural problem, as Richter sees it, is "a cult of accountability that has grown in Washington." DOE officials, he says, "don't get any praise [from Congress] for doing things right, but they get a lot of criticism if things go wrong—and a lot of new rules and directives to follow." The result, he says, is an inherently cautious, bureaucratic culture reluctant to embrace risk or change.

DOE did not respond to a request for comment. But remaking the department's management structure appears to be much on the mind of recently sworn-in Energy Secretary Ernest Moniz. Earlier this week, in testimony before the science committee of the U.S. House of Representatives, Moniz said that he has "been carefully reviewing the organization and management practices within the Department and am working with my staff to develop options to reorganize."